For whatever reason over the years Thanksgiving week tends to be market positive, especially the days bracketing Thursday. While we did see a nice rally Wednesday, the selling Monday and Tuesday did not make for a nice week for the bulls. In fact, this was the worst Thanksgiving week since 2011. For those with shorter term time frames there is no reason not to have a lot of cash raised here as there has been a lot of technical damage, and it’s going to take time to fix it. And now we are starting to see some worrying technical signs for the long term as well. On the news front, nothing new – worries about trade with China, global growth slowing etc were offered as the main culprits.
Oil again had a rough week with Friday’s rout (worst day since 2015) capping off the week. This is now 7 down weeks in a row, and on pace for the worst month in a decade.
Crude oil’s bear market worsened Friday, as investors wrestled with growing output from the U.S., President Donald Trump’s entreaties to key producers to keep prices lower, and generally rising inventories, despite a recent cold snap in many oil-consuming regions.
About that Bitcoin….
For the week the S&P 500 fell 3.8% while the NASDAQ plummeted 4.4%.
In economic news, durable goods fell by 4.4% in October, the largest decline in 15 months, and below expectations for a 3.4% decline. The report also showed orders for “core” capital orders falling slightly, further signaling a slowing in business investment.
Here is the 5 day weekly “intraday” chart of the S&P 500 … not via Jill Mislinski.
The week ahead…
Whatever the news flow, the technicals are saying be wary on every time frame. If you are a retail fiend, in store traffic apparently was down year over year 1.7% Thursday/Black Friday but online sales up mid 20% range.
There is a G20 meeting, along with some Fed speakers – maybe they will begin the dovish talk that markets love so much, regarding 2019 (a December 2018 rate hike is baked in).
Short term: Nothing good near term. The NASDAQ broke October 2018 lows – new lower lows are not positive. Of course some of the most violent rallies happen within downtrends so that can happen at any time. But right now it’s a time to be cautious.
The Russell 2000 – at least it didn’t make a new low…so there’s that.
While the NYSE McClellan Oscillator was positive there for a bit, it was not confirmed in the actual charts of the indexes so we said we’d take it with a grain of salt. So now we are back in the red.
Long term: Both of these indexes are now below key long term support levels – we’ve been saying for a few weeks now it would be interesting to see what happened in the NASDAQ fell out of it’s channel — I think a weekly 4.4% drop would count as “interesting”.
Charts of interest / Big Movers:
Monday, Spectrum Brands (SPB) fell 19% after reporting fiscal fourth-quarter earnings and sales that missed their targets, combined with a downbeat 2019 outlook.
Tuesday, Target (TGT) plunged 10.5%, after the discount retailer reported fiscal third-quarter earnings and same-store sales that missed expectations.
Kohl’s (KSS) likewise fell over 9% Tuesday, even after the firm beat Wall Street estimates for earnings and profit and raised its full-year 2018 guidance.
Wednesday, Foot Locker (FL) surged nearly 15%, following a Tuesday-evening earnings release that showed the company beating Wall Street estimates for third-quarter profits.
Apple (AAPL) was weak all week as whispers of order reductions among the supply base continue. With the “market leader” below the 200 day moving average – another feather is in the cap for bears.
Have a great week and we’ll see you back here Sunday!